NLB Chairman Resigns

The supervisors of NLB were notified of the resignation of Bozo Jašovič as the bank's chairman, while they also decided to postpone the decision on the sale of a 10.75% stake in Mercator to the retailer's Croatian rival Agrokor.

Jasovic will present the reasons for his decision, which he says is irrevocable, in a special statement on Wednesday. He will perform his duties at Slovenia's biggest bank, which is state-owned, until a new chairman is appointed. The supervisory board meanwhile decided to postpone the decision on the sale of Slovenia's biggest grocer Mercator to Agrokor, citing "the change of circumstances related to the takeover intention and the written warnings by the majority owner" as the reason. The press release by chief NLB supervisor Marko Simoneti refers to the situation at beverage company Pivovarna Lasko, which also put off a decision on the sale of its 23.34% stake in Mercator after US company Eatons Capital published an intention to take over Lasko, thereby probably also tying its hands regarding Mercator. NLB was moreover told by the Capital Assets Management Agency (AUKN), which manages state shares in companies, on Monday to consider leaving the decision on the Mercator sale to the bank's owners in case it does not get an approval from supervisors.

AUKN said that in this event it would would argue for an additional study of the potential impact of the sale of Mercator to Agrokor. Lasko and NLB - the latter ended up with the Mercator shares as collateral after a failed MBO at Lasko - are part of a consortium that is selling a 52.1% stake in Mercator. The sale of a 5.24% stake to Agrokor was approved today by the supervisors of NKBM, the other state-owned bank involved in the deal which opponents say could have disastrous consequences for the Slovenian food production chain. Jasovic was appointed NLB chairman on 1 October 2009 and made the bank react to the crisis with a new strategy that included a withdrawal from non-strategic markets and activities, divestment and cost cutting. Struggling with increased credit risks, the NLB group recorded a EUR 96.3m loss in the third quarter of this year. It ended 2010 with a EUR 202.3m loss. The bank got a EUR 250m capital injection in March this year, mostly with taxpayers' money which increased the share of the state in the bank to 45.6% while the share of Belgian KBC decreased to 25% plus one share. The management and supervisors are moreover proposing another capital increase of EUR 400m.

Source: The SloveniaTimes